Are Bridging Loans Fixed? What Stays Set on Pledged Shares

You already have the private-bank line. SORA has moved, a name in the book has marked down, and the top-up request is in your inbox. When borrowers ask whether bridging loans are fixed, they want to know if anything can still move after drawdown.

On a 3–24 month share-backed facility the quantum and the maturity are set for the agreed tenor, as set out in the facility agreement. A fixed rate is considered case by case, subject to terms, and share-backed loans carry top-up or margin-call triggers if the share price falls.

That is a different structure from a margin line. It is also not a promise that the same rate lasts for as long as you hold the shares. An extension is a new underwrite at the rate then on offer.

What a margin line can still change

A bank share facility is built to stay open, which is why almost nothing on it is frozen. The coupon usually tracks SORA plus a spread, and haircuts reset as the book marks. If LTV blows through the bank's trigger, you fund a top-up or the bank can sell.

That is the product working as designed. It is a poor match if you need a closed-end facility for a defined window: a completion, a fund distribution, a business sale. We have compared bank share lines with a private facility in more detail for borrowers in that squeeze.

Rikvin Capital is a direct private lender, an excluded moneylender under the Moneylenders Act, and we lend only to accredited investors and corporates. We are not a bank. We lend against the pledged asset and a named exit, not against a revolving credit limit.

What is fixed on a share-backed bridge

For the agreed tenor, these items are contractual:

• the interest rate, where a fixed rate has been agreed (considered case by case, subject to terms)
• the loan amount
• the maturity date
• how interest accrues, typically rolled up to the exit

If the security is Singapore-listed shares, we take a first charge over the holdings or the account and size the loan against that book at the outset. Rikvin does not lend against illiquid, thinly traded or concentrated holdings, or shares under lock-up or moratorium. Which exchanges, custodians and haircuts apply is considered case by case, subject to terms.

Are bridging loans fixed in every respect? No. Covenants, events of default and information undertakings still sit in the documents, and the top-up or margin-call triggers that apply if the share price falls are set out in the term sheet. If you default, enforcement remains available.

The same closed-end structure is how we write Singapore bridging loans against property. Related: we drew a $25 million facility over a weekend.

A term sheet can be issued in 24 hours. Drawdown is typically about two weeks, subject to valuation, KYC and the share charge. All figures are indicative.

When a fixed-term bridge is the wrong tool

Use a bridge when the exit is dated and you want a closed-end facility to that date. Do not use one if you need to trade the book freely, or if the holding period is open-ended. Nor is it the right instrument if the cheapest SORA-plus line is the point and you can live with the calls that come with it. A fixed coupon does not make bridging loans fixed forever.

The main risk is the other face of the certainty. You owe a known sum on a known date even if the shares are down, and a fall can trigger a top-up or margin call before then. A fixed rate does not shrink the debt. If the exit fails, you still repay, refinance or extend.

And an extension is not a continuation of the old coupon. We re-underwrite the portfolio, the exit and the market, then price the further tenor at the prevailing rate. There is no right to roll at the original figure.

If the window is real and the book can support the loan, the process from enquiry to drawdown is built around that closed-end structure. If it is not, stay on the margin line.

The bottom line

The closed-end test is the one that matters: if you can name the exit and want a closed-end facility to that date, a fixed-term share pledge is built for that. If you need the line to flex with the market, the margin facility is still the better instrument.